7 EASY WAYS TO BUILD A CREDIT HISTORY
1. GET A SECURED CREDIT CARD - That is the fastest way to establish a credit history for brand new borrowers (students, newcomers etc) or for people trying to re-establish credit after a bankruptcy. (Try to get credit card from a major bank and not from department stores)
2. PAY THE BALANCE IN FULL AND ON TIME because the interest rates on these cards are usually huge!
3. AVOID APPLYING FOR CREDIT CARDS TO OFTEN. Repeated requests for credit card may be interpreted as a sign that you’re in trouble and need a way to cover your debts, this will adversely affect your credit score.
4. PAY ALL YOUR BILLS ON TIME. Even some of the cell phone providers report to the credit bureau so, please pay all of your bills on time. Setting up pre-authorized payments is the great way to ensure payments are paid on time. Or, if you are not comfortable using this way, try to set up the reminders on your computers or phones to remind you to pay the bills on or before due date.
5. CHARGE REGULARLY AND PAY OFF IN FULL. Responsible on-going use of credit card will produce a good credit rating. Remember, you need to USE the credit card otherwise; your credit record will not change.
6. DON’T OVER-EXPOSE YOURSELF. Don’t have to many credit cards with small balance on them. Having 2-3 credit cards usually is the best.
7. WATCH THE CREDIT CARD LIMIT. – While using the credit card be careful NOT TO come to close to the credit card limit. (ex: the limit is $5000 and your balance is $4900). Try to stay up to a half of your credit card, maximum to 2/3 of the credit card limit.
If you are looking for a house to buy or even for refinancing, you need to be "visible" by credit bureau. Lenders want to check if you are paying your bills on time. If you do not have credit identity they will not be comfortable to give you any kind of loan (not even for the car).
This kind of situations we often see with clients that are older, widowed persons who have been cared by loving, controlling spouses. But, even young, professionals, who haven't bothered to establish their own credit identities, are in the same boat.
Once they decide to go forward and buy a house, condo or a car on financing or lease, they will hit the wall.
Don’t let this happen to you! Go to the nearest bank and ask them to help you establish your credit identity.
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